A consultant report that exposes a huge downside to the Markham Arena Project was kept as secret from the public over the past. As the report finally sees the light of day, Bob Mok’s serial column gives detailed account of problems with the project that cost $700,000 from citizens.
This is the second in a series of articles on this topic. For the first article, please visit the link - http://096.ca/news/631468
A report from Professor Humphreys identified understated/Excluded Construction Costs, as well as Financing and Investment Problems. The total construction costs was estimated at $416 million not $320 million as we were told.
It was reported that the construction firm excluded $42 million of identified infrastructure costs from the cost estimates, which would have to be paid for by Markham. No (property) tax payments were to be paid to Markham by the investors.
The debt under the Proposal would place significant annual cash flow burden on Markham and carries significant risks. In the proposed agreements, first lien and foreclosure right were absent. Due diligence on the financial qualification of the investor group was absent as well.
Other Operational Financing Problems were also identified. These included the uncertainty surrounding the lack of a major league tenant. The Lease payments were set too low and the terms of the lease did not sufficiently protect the immediate or the long-term financial interests of Markham.
Markham’s forecasts of expected tangible economic benefits contained in the PowerPoint presentation entitled 'Exploratory Economic Impact Analysis' were heavily criticized by Professor Humphreys for providing "No supporting documentation." He stated that “Based on the economic performance in other cities in North America over the last 30 years, building a new arena did not generate any tangible economic benefits for cities.”
While Markham claimed that property values increased 12 times in Columbus Ohio after Nationwide Arena was built, Professor Humphreys stated that he was not aware of any such study and his own research showed only a 10% increase.
The projections for attendance and ticket revenues for a Junior Hockey tenant appeared to be "very ambitious" at 5000 per game based on average attendance elsewhere. Humphreys suggested a number of 3500 per game initially before dropping to an average of 3000 as being more realistic, reducing projected attendance by 72,000 annually.
MCCRG's directors and many concerned residents did their own research on the economics of arenas at the time and managed to come up with some of these same points and even some of the methods used by Professor Humphreys who has immense knowledge in this area.
The taxpayers of Markham paid over $700,000 for these reports and it is clear that if they can be released now, they should have been released back when they were most needed. The reasoning that the City used for not releasing the reports was obviously not good enough for the Freedom of Information and Protection of Privacy Commission and, in the end, after years of protesting, the City was required to release the reports in order to comply with the Commission's decisions.
由于万锦市府不愿倾听居民的合理需求，而居民希望市府能够更加积极地回应民众关切，MCCRG ( www.MCCRG.org )在反对体育馆项目的呼声中应运而生。此后，MCCRG便一直代表居民利益行事，监督市议会议程，调研重要问题，并对市府工作人员和市议会所作的看似不可能符合万锦居民最佳利益的决策提出质询。
The struggle over the arena gave birth to MCCRG ( www.MCCRG.org ). Markham wasn't listening to the legitimate concerns of the residents and they wanted them to be more responsive. Since then, MCCRG has continued to work on the residents’ behalf, monitoring Council agendas, investigating issues of importance, and questioning decisions of staff and Council where those decisions might not seem to be in the best interests of the residents of our City.
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